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Failing to extend Medicaid to hundreds of thousands low-income residents in Ohio will have a “staggering” impact on businesses across the state, says Matt Davis, vice president of government affairs with the Cincinnati USA Regional Chamber.

On Thursday, Davis spoke from the Statehouse steps in Columbus to thousands of advocates gathered to lobby Republican lawmakers who Tuesday axed an expanded Medicaid program from the state’s next proposed budget.

“Our decision to support Medicaid expansion comes from both our heart and our head,” said Davis. “It makes good business sense.”

Under President Barack Obama’s health reform law, the Patient Protection and Affordable Care Act, businesses with more than 50 employees must provide health care coverage or face penalties up to $3,000 per employee.

An expanding Medicaid program would provide health care coverage to low-earning employees, preventing businesses from incurring penalties for those workers, Davis said.

If Ohio chooses not to expand, the costs to businesses across the state could be as high as $88 million, Davis said.

The impact will likely be felt most severely among service-sector businesses such as Norwood-based Jancoa Janitorial Services Inc.

Owner Mary Miller says nearly 70 percent of her 320 full-time employees would likely qualify for Medicaid should Ohio extend coverage to families and individuals whose incomes are up to 138 percent of the federal poverty level.

That’s about $15,400 per year for an individual and $32,000 per year for a family of four.

If the program’s not expanded, she faces more than $640,000 in penalties. Or she’ll have to spend about $1.4 million on employee health benefits.

“I’m in the cleaning service industry – we don’t have those kind of margins,” she said. “I’ve never had a profit margin that would cover those costs.”

The 2010 original version of Affordable Care Act made Medicaid expansion a requirement for states. But the U.S. Supreme Court ruling last June allowed states to decide whether to participate.

In February, Gov. John Kasich joined a growing contingent of Republican state leaders to support expansion – in spite of the party faithful’s widespread disdain of the health care law.

In Ohio, the expansion would extend health care coverage to 366,000 individuals and working poor families.

Locally, nearly 70,000 residents in Butler, Clermont, Hamilton and Warren counties would qualify for Medicaid coverage, according to a report from the Health Policy Institute of Ohio.

House Republicans have said an expanded program isn’t completely off the table, but there are too many unknowns in Washington to consider the move now. Instead, GOP leaders offered up a plan to spend $50 million in each year of the next state budget on additional mental health and addiction services.■